So last night I was on charts , it looked like a supply zone was forming but I could not trade cause it was late so I just drew my supply zone.I come home today I check my charts and see that price has just entered my supply zone . I waited a bit before placing my trade but then it look like it was going in my direction so I decided to go short . It went in my direction for some time but then a few hours later I get stopped out.what did I do wrong
My guess is nothing.
Why is that a reason to imagine that youâve done something wrong? 
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No need to automatically assume you did something wrong because price did something unexpected.
The first thing you did was identify a potential supply zone, then you saw price give confirmation of a supply zone, so you opened a trade and set a stop-loss. None of those things is wrong in itself. The issue is that a âsupply zoneâ is not an objective feature, it is not what the charts show - the charts show only price. A supply zone is a traderâs interpretation of what the charts show, and which forms a basis for a trade decision. So maybe your interpretation of what the charts showed was dead right, but as itâs a low probability trade, this time it just didnât pay off.
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I agree with tommor, just because you lost doesnât mean you did something wrong.
What I would say, is that AUDUSD is in a slight uptrend on the daily chart. So the more likely play is that a supply zone should be on a retracement, not an impulse move. In an uptrend it is more likely to break out above and bounce off the bottom.
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Firstly, welcome to the forum, @shawn23_stg
Secondly, may I ask a question or two (or more)? What do you think your win-rate will probably be, or might be, with this method? Do you think it might be around 60% or maybe even 65%? That would be great, wouldnât it? Do you think maybe this was just one of the other 35%/40% of less lucky trades that donât win?
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Welcome to Babypips!
I concur with the sentiment of others here in that you donât necessarily lose because you did something wrong, nor will you win just because you did everything correct.
Consider whatâs happening on the higher time frame and use that to build a narrative for the lower time frames.
Looking at the daily chart price violated the last lower high after a sharp V reversal. So even though itâs currently ranging, it is still technically bullish structurally. Even the range is slightly bullish.
Price action wise on the daily also shows some bullish indications
On the M30 price has been making double bottoms at supply and at support prior to your sell so itâs a lot for price to overcome especially considering the higher time frame.
In general with supply and demand, I donât trust a zone that doesnât create a new high or low or doesnât violate an opposing zone.
Donât let a loss rattle you, itâs a part of the game. Good luck on your next trade!
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Nothing wrong.
How many pips was your stop from your entry, and how many pips from you entry to where you wanted to take profit?
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This here. Great stuff!
Yea, this was my next question too.
My stoploss was $2.92 and my takeprofit was $12.00
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Weâll I really donât know because I just started learning about supply and demand and ever since I started applying it to the charts Iâve been in a losing streak for weeks
Okay letâs say I consider whatâs happening on higher time frames and itâs not correlating with my lower time frame .how is that supposed to help me and what do I do if thatâs the case
Your profit target is too far away. Expect to win only 20% of the time with a take profit distance that is 4x bigger than your stop loss.
On the inverse, your broker has an 80% chance of stopping you out.
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It sounds like your analysis was on point, but the execution may need refinement. Entering a trade just because price enters a supply zone can be risky without clear confirmation (e.g., bearish candlestick patterns or a break in structure). Additionally, ensure your trade aligns with higher timeframe trends and always check for news that might cause volatility. Lastly, consider whether your stop loss had enough room beyond the zone to account for market noise. Your setup was valid, but patience and precision in timing and risk management are key.
When your lower time frame setup is contrary to the higher time frameâs current direction, your trades will be lower probability. Higher time frame zones or potential reversal points will affect your lower time frame trades, so knowing where these levels are gives you a birds eye view of where you should close a trade if approaching or open a trade if leaving a higher time frame zone.
Iâve used this image to explain this to someone else
So even if the higher time frame is overall bullish and youâre buying on the lower time frame, if you are buying while the higher time frame is retracing, you are out of alignment.
I try not to think about the market in terms of trends since we are almost always trading counter trend to some other time frame. I look at the market as a series of market structure trading ranges and select the range that Iâll use and trade within those boundaries.
You can substitute the word âtrendâ with âmarket structure trading rangeâ in this image.
Market structure is king and using it can make any strategy more effective.
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This is very inadvisable, when youâre starting out (and in future too, actually!).
Your rewrd-to-risk is way too high. Itâs much easier to trade successfully with a reward closer to your risk than that.
The win-rate you can ever achieve if your targets are four times the size of your stop-losses is simply too low for it to be manageable. Youâd have much better chances if you make the two the same size and try to profit simply by winning more than half the trades.
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I think the issue was that the supply zone wasnât strong. Price entered it with a lot of momentum and didnât show any clear signs of rejection. It also looks like there was a liquidity grab above the zone before price briefly dropped. Without confirmation like a strong bearish candle or a structure break, entering just because the price touched the zone can be risky.
You can buy âsupply zonesâ or sell âsupply zonesâ⌠with a 1:4 R:R, youâll still always be 20% win rate. Historical price action cannot predict future price discovery better than random.
âConfirmationâ will only get you worse pricing.
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Itâs really important to understand this clearly, before you start, @shawn23_stg .
And to understand its implications for your position-sizing. The inevitable, statistically predictable losing runs and losing patches will be devastating, without your having done anything âwrongâ at all, apart from your R:R.
I wouldnât dream of it, myself. 
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Itâs tough for people without formal statistical training to appreciate, because itâs so very counter-intuitive.
But with an R of 4.0, youâll have a consecutive losing run of over 40 trades at some point, and maybe another consecutive losing run of over 30 trades not very long before or after it, so youâll need VERY tiny position sizes to avoid blowing the account.
Itâs not really viable, because youâll never know whether youâre having a foresseable bad patch or it just doesnât work any more.
Thereâs no way to tell the two situations apart.
Honestly, I wouldnât even wish it on the Cardassians. 
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Itâs not the win/loss rate that kills accounts, but the distribution of losses, and their streaks. After running tons of simulations, I can conclude that an R multiple above 1 always has bigger losing streaks, every R below one has bigger winning streaks.
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